Kia ora tatou. Conference organisers, fellow speakers, participants from around the world:
Thank you for inviting me to open the 2010 International Gambling Conference. I'd like to welcome you all here today in my role as the Minister responsible for New Zealand's Gambling Act and for gambling policy in New Zealand.
I extend an especially warm welcome to those who have travelled long distances to be here. If this is your first time in New Zealand, I hope you'll take the time to sample some of the products, sights and experiences that we have to offer.
This conference is a great opportunity to review and discuss developments in technology, and the implications of technology for the gambling sector.
I trust you'll all enjoy the occasion, and make the most of the opportunity to meet and discuss these important issues with your fellow participants.
First, I'd like to talk about the gambling sector and the Government's priorities for the sector.
Then I'd like to talk about current and emerging gambling technologies, and their implications.
I should perhaps emphasise at the outset that, when I talk about "the gambling sector", I'm talking about the players, gambling operators, the regulators, problem gambling intervention services, gambling researchers, and the providers of gambling equipment. In fact, just about anyone who has any involvement with the area.
It's worth noting to begin with that many people have harmless fun gambling, and some forms of gambling in New Zealand raise a great deal of money for community purposes.
However, it also entails risks. Therefore, any fun for players, benefits to the community, and profits for operators, need to be balanced by measures to prevent and minimise the harm caused by gambling.
Because of the large sums of money involved, there also needs to be measures to limit the opportunities for the crime and dishonesty that can be associated with gambling.
This is why the Government's policy on gambling is to maximise the benefits to the community while minimising the risk.
Achieving that balance is what New Zealand's Gambling Act is all about.
Some key objectives of the Act are to:
- Prevent and minimise harm;
- Facilitate responsible gambling;
- Limit opportunities for crime and dishonesty; and to
- Ensure that money from gambling benefits the community.
The four main forms of gambling in New Zealand are:
- Gambling in casinos;
- Racing and sports betting run by the New Zealand Racing Board (which runs the TAB);
- New Zealand Lotteries Commission products; and
- Gaming machines in pubs and clubs.
The 6 casinos we have in this country are fully commercial businesses. Racing and sports betting are run to raise money for the racing industry, which is a traditional part of New Zealand society, particularly in rural areas.
Lotteries Commission products, like Lotto and Instant Kiwi games, are sold to raise money for community purposes. And gaming machines in pubs and clubs are also run to raise money for the community.
More people buy Lotteries Commission products than participate in any other form of gambling. However, as far as spending goes, more money is spent on gaming machines in pubs and clubs than on any other form of gambling.
Last year, players spent around $890 million on gaming machines in pubs and clubs. That was about 44 percent of all the money spent on the four main forms of gambling. That percentage has at times been over 50%.
An even higher percentage of the people who seek help for gambling problems say that these machines are the main source of their problems.
Therefore, it might not surprise you to learn that the current priorities for the gambling sector largely relate to these machines. Those priorities are to improve compliance with gambling laws and to enhance the integrity of funding practices.
In terms of current technology, many of the changes over the last decade also relate to these machines. For example, in New Zealand we have recently introduced an Electronic Monitoring System, or EMS. This has greatly enhanced our capacity to achieve compliance with the Act.
It has also significantly increased the amount, and improved the reliability, of the data available for researchers and intervention services. The EMS is a good example of technology assisting with the Act's policy objectives.
This system was put in place about 3 years ago. It enables the Department to track and monitor the operations of all gaming machines in pubs and clubs. The system can tell how much is gambled on each machine, what that machine pays out in prizes, and how much money should be banked.
The system can also remotely disable any machine that is functioning incorrectly, or to enforce a compliance penalty.
The EMS helps the Department of Internal Affairs to ensure the integrity of games and accurate accounting for the proceeds of the machines. It makes it much easier to determine how much gaming machine operators are absorbing in expenses, instead of that money being available for community purposes.
It also delivers accurate, comprehensive information on spending in each region, from one time period to the next. The Department puts this information on its website each quarter.
Combining this information with, for example, Ministry of Health statistics on help-seeking, creates a valuable resource for policy makers, researchers, and intervention services.
Territorial authorities have also found this information immensely helpful when they are reviewing their policies on whether to allow new gaming machine venues and additional machines in their districts, as they are required to do at least every three years.
I am told that, to date, the operation of the EMS has exceeded expectations.
More recently, all gaming machines in pubs and clubs and in casinos have also been required to have player information displays, in the form of ‘pop-ups'.
As you might know, pop-ups in New Zealand interrupt games at irregular intervals of no more than 30 minutes continuous play. They provide basic information about how much has been won or lost and the duration of play. Players then choose whether to continue or to end that session.
The evidence suggests that pop-ups can be a useful tool to help prevent and minimise the harm from gambling. For example, some gamblers have already said that seeing pop-ups was a factor in their decision to seek help.
Later in the conference you'll hear from Mike Hill, the Department's Director of Gambling Compliance. Mike will talk about the Integrated Gambling Platform, or IGP. It's another example of the application of current technology to gambling.
This platform will link the EMS with other information processing systems. It will allow for electronic licensing and for a grants database to be established.
Once rolled-out, the IGP should enhance the Department's existing licensing system, further improve the Department's ability to track gaming machine funds, and help to ensure that money that should go to the community, actually gets there.
It will also provide enhanced information for people wanting to know the precise amount and nature of the community benefit from these machines.
In relation to current and emerging technology and gambling, there has been one other major development over the last decade. That is internet gambling.
It is generally illegal to run an internet gambling website within New Zealand. A ban on advertising overseas gambling within New Zealand also discourages people gambling on overseas-based websites. These two prohibitions are intended to help mitigate the problems that can be associated with gambling through the internet.
The two exceptions are gambling promoted by the Lotteries Commission, and gambling authorised under the Racing Act. Both agencies provide a relatively safe and regulated online alternative to the games offered by overseas-based internet gambling operators.
The TAB has offered telephone betting for decades, and online betting since 1998. It also offers betting through interactive television. For all these channels, players must open an account with the TAB, usually in person. They have to verify their age and identity when opening an account. This means the TAB can monitors account activity and look for signs of potential problem gambling.
The Lotteries Commission began selling tickets for its lottery products online in 2008. As part of the approval process, the Commission built in a range of safeguards designed to minimise the risks of players developing gambling problems.
These safeguards go well beyond any measures in place in a normal Lotto shop. They include requiring players to open an account, and either accepting the mandatory spending limit of around $70 a week, or setting a lower personal limit.
If players are having difficulty, they can choose to exclude themselves from buying one or more of the available online products. The Lotteries Commission also monitors each player's activity and makes contact when a player's behaviour suggests there might be a problem.
The number of people with My Lotto accounts quickly rose to one hundred and twenty thousand. Over thirty thousand players set personal spending limits of $20 a week or less, which is well below the mandatory limit. Within the first year of operation, almost 1,700 people had self-excluded themselves from the Keno game, which is drawn twice a day.
These safeguards and the few figures I've quoted illustrate the potential of technology. It helps resolve the tension between the desire to increase convenience for players and to increase Lotteries profits for the community, with the need to limit any potential harm.
Both the New Zealand Racing Board, which runs the TAB in New Zealand, and the Lotteries Commission have suggested that they could be allowed to offer additional products over the internet. I'm also aware that the draft Australian Government report released before Christmas suggested some liberalisation of internet gambling in Australia.
Of course there are literally thousands of internet gambling sites around the world. Some of these sites are almost totally unregulated. Even those that are regulated, tend not to include much in the way of harm prevention measures.
I think we all realise that whatever governments do to discourage them, some people will always find a way to gamble through these sites. And today, almost every computer, mobile phone, interactive television, Playstation and Nintendo DS can connect to the internet, and onto these online gambling sites.
These facts led the Australian Productivity Commission to suggest that it would be preferable for Australians to gamble through regulated sites in Australia, rather than through potentially very harmful sites based overseas.
It will be interesting to see where the final report goes on this. The Productivity Commission was due to present its final report to the Australian Government this coming Friday.
We can understand the Productivity Commission's thinking. In the meantime, however, I can advise that New Zealand has no plans to extend its internet gambling offerings.
To date, existing policies seem to have limited the number of people in New Zealand gambling on overseas websites. After looking at the available evidence, the Department of Internal Affairs has concluded that no more than 2% of adults in New Zealand currently gamble on these sites.
The products offered online within New Zealand are relatively safe. Many of the other products that could be offered are potentially far more harmful. Therefore, the Government has decided not to permit an expansion of New Zealand's internet gambling products in the medium term.
However, we will continue to monitor developments in internet gambling, and the approaches taken to it, in Australia and around the world.
We are also monitoring developments in harm prevention technology. In particular, several countries, including Australia, are trialling pre-commitment or player tracking systems.
These systems can:
- Allow players to set the maximum amount they are prepared to spend;
- Provide personal activity statements to help players manage their gambling;
- Gather information for regulatory, research and policy development;
- And even potentially monitor behaviour and intervene in real time if a player seems to be getting into difficulty.
As you might expect, there are also significant issues with such systems. For example, two key issues are how well they work unless each player can be uniquely identified, and whether unique player identification is acceptable even if players are anonymous.
Another issue is how well they will work if there isn't a single universal system. It's difficult to see the value of such a system, if players that reach their pre-determined limits in one pub, can simply cross the road to another.
And of course, a critical issue is the cost of these systems. This could run into tens of millions of dollars, which would have to be weighed up against any potential benefits.
We will continue to monitor new developments around the world, but at this stage we have no plans to introduce such technology - in the medium term at least.
Another development we are keeping an eye on is server-based gambling. This technology could effectively turn gaming machines into ‘dumb terminals', with all the gambling and harm prevention software, and player records, kept on a single server.
This could reduce the costs of gaming machine operators. Games could be changed and updated without the need to manually upgrade each gaming machine. This means that players could enjoy a lot more variety than they do at present. Understandably, this technology appeals to operators and players.
Server-based gambling might also make it much easier to store, retrieve and analyse information for gambling researchers. Finally, these systems might make it far easier to implement an effective pre-commitment or player tracking system.
Once again, however, the initial cost has to be considered. We will continue to keep an eye on how this technology develops overseas.
As I've outlined, technology offers a lot of potential. It has the potential to deliver more fun and variety for the player. It can help deliver higher profits for the community to use, and it can help us control and minimise problem gambling.
It also comes with risks, particularly with online gambling.
Therefore, the challenge for the Government - and for New Zealand - is to make the best use of technology while minimising the harm it can cause.
In New Zealand at least, we'll continue to monitor developments around the world until the ways to best meet that challenge become clearer. This gathering of experts should help in that process.
It has been my pleasure to open this conference.
Please have an enjoyable and productive three days, and take advantage of the opportunity to meet and talk about these issues - and the solutions to them.